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HQ audit goes to Manitoba Justice

Wyatt calls for RCMP probe into city dealings

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After probing the police-HQ project, KPMG said the city must establish proper procurement procedures and the administration must follow them.

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After probing the police-HQ project, KPMG said the city must establish proper procurement procedures and the administration must follow them. Photo Store

Another audit of city operations is going to Manitoba Justice.

Council voted 11-5 Wednesday to request the province review the KPMG audit of the police-headquarters project.

"I'm deeply concerned about what I read in this report: numerous questions not answered to satisfaction," said Coun. Paula Havixbeck.

It's the second audit sent for provincial review in seven days.

Last week, council sent the EY audit into 33 real estate transactions to Manitoba Justice, also seeking a review of its findings.

That didn't go far enough for Coun. Russ Wyatt, who repeated his call for the province to launch a judicial inquiry into the dealings at city hall based on the findings of those two audits and another released in the fall into the fire-paramedic program.

The Selinger government shouldn't have to wait to be invited to launch an inquiry, Wyatt said.

Repeated findings of mismanagement by the administration and beneficial treatment of certain individuals and firms conducting property dealings underscore the need for an inquiry, he added.

"The RCMP should be sent in here and files seized and people subpoenaed to tell what's going on," Wyatt said.

The province issued a statement Wednesday saying it hadn't received the requests to review either audit.

"Manitoba Justice will determine the best method for review of these documents once they are received from the city," a government spokesman said.

"The province is committed to a thorough review and will advise of next steps when that review is complete."

The KPMG audit dominated a lengthy council agenda in which two members of the KPMG team fielded questions from councillors but failed to yield new information.

The audit and a second report, a value-for-money study on the project, were accepted by council and administration instructed to implement the recommendations from both reports.

The KPMG audit found civic officials failed to follow city procedures put in place to manage the design, procurement and construction of major projects.

More worrisome, the report also found the city lacked many essential policies and procedures to govern administrative handling of such projects.

A proposal by Couns. Brian Mayes and Harvey Smith to hold a special meeting of council next week to question administration on both audits failed to get support.

Mayor Sam Katz said if any councillor has questions, they should approach the administration directly.

Coun. Jenny Gerbasi, who called for the EY audit into the real estate transactions, rejected a special meeting, explaining it would be inappropriate to "grill" administrators publicly.

Coun. Justin Swandel, a staunch supporter of the administration throughout the firestorm the three audits have generated, said another meeting would be an opportunity to "score points" and not get new or relevant information.

Earlier in the day, KPMG team members John Heskin and Mark Bullen summarized their damning report and fielded questions for half an hour.

While the auditors made 25 recommendations, Bullen said the top two issues city hall needs to address are the establishment of proper procurement procedures and administration adherence to them and the risk posed by the awarding of single-source contracts.

Bullen said awarding a contract to a firm without going to tender for the services is an uncompetitive process that exposes the city to unnecessary risk.

Heskin and Bullen could not explain why council was told in 2009 that converting the former Canada Post warehouse facility on Graham Avenue into a modern police headquarters would cost $105 million. The final construction cost is $155 million.

Katz told the KPMG team it was a consulting engineering firm and a civilian employee with the Winnipeg Police Service who gave council the $105-million figure during a briefing on the project.

The KPMG auditors said they did not determine if the city received proper value for any of the contracts associated with the project, which cost $210 million in total.

aldo.santin.freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 17, 2014 A6

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Updated on Thursday, July 17, 2014 at 7:57 AM CDT: Changes photo

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